Brazil court to rule soon on taxes on Vale's foreign profits

Reuters Staff

2 Min Read

* Gov’t says Vale owes about $15.2 billion in back taxes

* Judgment of case to be made in first half of 2013

* Case relates to Vale’s and other companies’ foreign profit

BRASILIA, Feb 28 (Reuters) - Brazil’s Supreme Court will rule in the first half of this year on whether iron ore miner Vale must pay an estimated $15.2 billion taxes on earnings from its operations abroad, the president of the court said on Thursday.

Vale and other companies represented by the national industrial association are disputing back charges the government is seeking on profits earned abroad, which they say would be tantamount to double taxation.

Other companies affected include state-controlled oil producer Petrobras and engineering company Odebrecht .

The company has avoided having to make any payment so far because of a court injunction, which says it would only have to pay the taxes once the case is concluded, if it loses. Vale says having to pay the taxes would disrupt its investment plans.

“This case, that is already being judged, will conclude this semester,” Joaquim Barbosa, president of Brazil’s highest court, told a gathering of foreign correspondents.

He said the case was not specifically related to Vale but applied to it and other companies with earnings from foreign operations.

Barbosa said the case had been with the Supreme Court for about six years and some judges who had voted on it had since left the court, which had made it more difficult to achieve a “coherent” judgment. Most of the judges voted and subsequently retired from the court voted that the taxes should be paid.